Chief Commissioner of State Revenue v Citivale

[2000] NSWCA 111

Reported Decision: (2000) 107 lgera 338
2000 ATC 4327

New South Wales

Court of Appeal

CITATION:	Chief Commissioner of State Revenue v Citivale [2000] NSWCA 111
FILE NUMBER(S):	CA 40774/98
HEARING DATE(S):	20 April 2000
JUDGMENT DATE:	4 May 2000
PARTIES :	Chief Commissioner of State Revenue v Citivale Pty Limited
JUDGMENT OF:	Handley JA at 1; Sheller JA at 16; Davies AJA at 20

LOWER COURT JURISDICTION :	Administrative Law Division
LOWER COURT FILE NUMBER(S) :	ALD 30018/97
LOWER COURT JUDICIAL OFFICER :	Hodgson CJinEq

COUNSEL:	H R Sorensen (Appellant) B J Sullivan SC (Respondent)
SOLICITORS:	I V Knight Crown Solicitor's Office (Appellant) Gadens Ridgeway (Respondent)
CATCHWORDS:	LAND TAX - exemption - construction - whether exemption in earlier Act applied - Local Government Act 1919 (NSW), s 651(1) - Land Tax Management Act 1956, ss 7(1), 9(1), 10(1)(a), 21C(1)
LEGISLATION CITED:	Local Government Act 1919 (NSW) Land Tax Assessment Act 1910 (Cth) Land Tax Management Act 1956 (NSW) Licensing Act 1958 (Vic) Justices Act 1958 (Vic) Local Government Act 1993 (NSW) Stamp Duties Act 1920 (NSW)
CASES CITED:	Rose v Hvric (1963) 108 CLR 353
DECISION:	Appeal allowed with costs - orders made

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40774/98
ALD 30018/97

HANDLEY JA
SHELLER JA
DAVIES AJA

4 May 2000

CHIEF COMMISSIONER OF STATE REVENUE v CITIVALE PTY LIMITED

LAND TAX - exemption - construction - whether exemption in earlier Act applied - Local Government Act 1919 (NSW), s 651(1) - Land Tax Management Act 1956, ss 7(1), 9(1), 10(1)(a), 21C(1) The respondent was assessed for land tax for the tax years 1990 to 1993 inclusive in respect of properties it had acquired from Woollahra Council. The subject land had been used as a Council car park and continued to be used for that purpose until April 1993. The company claimed exemption under s 651(1) of the Local Government Act 1919 which operated “Unless the contrary is expressly provided by any Act passed after the commencement of this Act”. The Commissioner ruled that the land was not exempted by this provision and issued amended assessments. The company objected to these assessments but its objections were disallowed. It successfully appealed to the Supreme Court, obtaining a declaration that it was not liable for land tax in the relevant years. The Commissioner appealed arguing that the Land Tax Management Act 1956 contained its own code of exemptions which exclude the operation of s 651(1).
HELD, Allowing the appeal: (1) Section 651(1) of the 1919 Act cannot detract from the operation of a later enactment evidencing a contrary intention. Rose v Hvric (1963) 108 CLR 353 applied. (2) The proper approach is to examine the scheme of the Act which is later in time and consider whether it is inconsistent with the earlier. Sections 7(1) and 9(1) of the 1956 Act impose tax on all land in the State “which is not exempt from taxation under this Act”. These express provisions exclude exemptions from taxation under some other Act such as the 1919 Act. (3) The only relevant exemptions in the 1956 Act are those contained in s 10(1)(a) for the 1990 and 1991 years, and in s 21C(1) for the 1992 and 1993 years. The subject land was not within these exemptions because it was owned by the company at the material times and the exemptions only apply to land owned by the Council. The appeal therefore should be allowed.

ORDERS

(1) Appeal allowed with costs;

(2) Judgment and orders of the Administrative Law Division set aside;

(3) In lieu thereof order that the appeals to that Division from the disallowance of the company’s objections to the amended assessments for the 1990, 1991, 1992 and 1993 land tax years be dismissed;

(4) The respondent is to pay the Commissioner’s costs of the proceedings in the Administrative Law Division;

(5) The respondent to have a certificate under the Suitors Fund Act if qualified.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

40774/98
ALD 30018/97

HANDLEY JA
SHELLER JA
DAVIES AJA

4 May 2000


CHIEF COMMISSIONER OF STATE REVENUE v CITIVALE PTY LIMITED

JUDGMENT

1 HANDLEY JA: This is an appeal by the Commissioner from the judgment of Hodgson CJinEq who upheld objections by Citivale Pty Limited to amended land tax assessments for the 1990, 1991, 1992, and 1993 land tax years. The company acquired the subject land at 79 Grafton Street, lots 1-4, and 1 Grafton Street, Woollahra from the Woollahra Council on 13 February 1989. The land had been used as a Council car park and after its transfer it continued to be used as a Council car park until April 1993. The Chief Judge in Equity held that at the relevant times the land was under the management and control of the Council. The company claimed exemption from land tax in reliance on s 651(1) of the Local Government Act 1919 (the 1919 Act). After some initial uncertainty, the Commissioner took the view that the land was not exempted by this provision. Amended assessments were issued in December 1995. Citivale objected to these assessments on 20 February 1996 and its objections were disallowed on 16 December that year. The company then appealed to the Supreme Court. 2 The company’s appeal to the Supreme Court was allowed by the Chief Judge in Equity who made a declaration that it was not liable for land tax in the relevant land tax years in respect of the subject property by virtue of s 651 of the 1919 Act. This provided until its repeal in 1993:

“(1) Unless the contrary is expressly provided by any Act passed after the commencement of this Act, taxes and stamp duties shall not be chargeable or payable under any Act now or hereafter in force upon -
(a) any land vested in or under the management and control of the Council;
(b) any property or income of the Council;
(c) any receipt or acquittance given by one servant of the Council to another in the course of the internal administration of the Council’s business; and
(d) any receipt for any money, or for the return of any money, deposited by any person with the Council in relation to any contract entered into by him with the Council, or in relation to any tender made by him for any contract with the Council.
(2) This section shall not be deemed to extend to any rate or assessment made or levied by -
(a) another Council;
(b) the Metropolitan Water, Sewerage and Drainage Board;
(c) the Board of Fire Commissioners of New South Wales”.

3    In 1919 the only land tax was the Federal tax levied under the Land TaxAssessment Act 1910 (as amended). Section 651 had no operation in relation to the Federal tax but land owned by local councils was expressly exempted by the Federal Act. The Commissioner has argued that the Land Tax Management Act 1956 (NSW) (the Act), which was passed after the Commonwealth vacated the land tax field, contains its own code of exemptions which excludes the operation of s 651(1)(a). 4 The Chief Judge appears to have approached the question through s 651 of the 1919 Act, no doubt because counsel addressed on that basis. In my judgment the correct approach is to examine the scheme of the later Act and then consider whether it is inconsistent with the earlier. Section 651(1) commences with the words:

“Unless the contrary is expressly provided by any Act passed after the commencement of this Act …”.

5    In Rose v Hvric (1963) 108 CLR 353 the High Court considered the meaning of this and equivalent provisions where the relationship between two statutes of the same Parliament has to be determined. That appeal concerned s 154 of the Licensing Act (Vic) and s 74 of the Justices Act (Vic), both passed in 1958. The Court in its joint judgment at 357-8 said:

“In Gourlay v Casey (1927) 38 CLR 586 the expression ‘unless otherwise expressly provided’ as used in the Insolvency Act 1915 (Vict) was held to mean ‘unless some inconsistent provision is expressly made’. The qualifying words with which s 74 of the Justices Act begins may be similarly paraphrased, but some analysis even of the paraphrase is required. Notwithstanding a doubt expressed by Lord Dunedin in In re Silver Bros Ltd [1932] AC 514, 523 a particular enactment may be effectual to exclude the general provisions of s 74(1) of the Justices Act though it makes no special reference to it: see Lord Blackburn’s speech in Metropolitan District Railway Co v Sharpe (1880) 5 App Cas 425, 441. That this must be so becomes obvious when the case is considered of a particular enactment later in time of commencement than s 74(1). However that provision were framed, it could not detract from the operation of the later statute according to its true construction. Because this is so, exceptive words such as those which introduce s 74(1) had no legal effect beyond saving earlier enactments which otherwise would be inconsistent with the provision introduced. In regard to later enactments they ‘go no farther than the general law’: Garnett v Bradley (1878) 3 App Cas 944, 965 and ‘are not really necessary because if the later Act shows a contrary intention the earlier enactment cannot control it. But they remind us of the general rule’. So Isaacs J observed in Bennett v Minister forPublic Works (NSW) (1908) 7 CLR 372, 384, speaking of the exceptive provision ‘unless the contrary intention appears’. Whatever the verbal formula employed it cannot have in regard to later legislation any greater force or value than that expression. As Keating J remarked in Chorlton v Lings (1868) LR 4 CP 374 ‘to do more would be exceeding the competency of parliament with reference to future legislation’ (ibid 395).
What, then, is the point of the insistence in such an exceptive provision as that which introduces s 74(1) of the Justices Act that the general provision shall apply except where otherwise ‘expressly’ enacted? In appropriate contexts ‘expressly’ may be used as the antonym of ‘impliedly’, as it is … in the statement that ‘an express repeal of or exemption from an earlier enactment is no more effectual than if it were created by implication’: Goodwin v Phillips (1908) 7 CLR 1, 16. But this cannot be the sense of the word in section 74(1), for the reason which the statement just quoted provides. The word merely serves to emphasise the generality of the main provision by making clear that no case is outside that provision unless that is the necessary result of the operation of another enactment according to the intention it manifests: see MetropolitanDistrict Railway Co v Sharpe (1880) 5 App Cas 425 and Chorlton v Lings (1868) LR 4 CP 374”.

6 The Act exempted local councils from the tax. The exemption which applied in respect of the 1990 and 1991 land tax years was that contained in s 10(1)(a) which was as follows:

“Except where otherwise expressly provided in this Act the following lands shall be exempt from taxation under this Act:-
(a) land owned by the Crown, or by a council of an area or a county council within the meaning of the Local Government Act 1919 , as amended by subsequent Acts, or by any public authority”.

7 In the later tax years the relevant exemption is that conferred by s 21C(1) which provides:

“The Crown, a local council, a county council or a public authority is not liable for land tax in respect of land it owns (except as specifically provided by Part 3)”.

8    Although the Council as owner is exempt, lessees of council land are liable to land tax under s 21C(2) which provides:

“A lessee (other than a sub-lessee) of land or part of land owned by the Crown, a local council or a county council is for land tax purposes to be considered the owner of a parcel of land (‘the notional parcel’) consisting of the land or part leased. The Crown, local council or county council is then not to be considered owner of the notional parcel”.

9 The scheme of the Act is to impose the tax on all land in the State which is not exempted under the Act. This appears from ss 7, 8 and 9 which provide:

“7(1) Land tax at such rates as may be fixed by any Act is to be levied and paid on the land value of all land situated in New South Wales which is owned by taxpayers (other than land which is exempt from taxation under this Act).
…
8 Land tax shall be charged on land as owned at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied.
…
9(1) Land tax is payable by the owner of land on the taxable value of all the land owned by that owner which is not exempt from taxation under this Act”.

10 The only relevant exemptions in the Act are those contained in s 10(1)(a) for the 1990 and 1991 years, and in s 21C(1) for the 1992 and 1993 years. These exemptions only apply to land owned by the Council. The subject land is not within these exemptions because at the material times it was owned by the company. 11 In my judgment ss 7(1) and 9(1) of the Act are express provisions to the contrary for the purposes of s 651(1) of the 1919 Act so that the exemption it confers has no application to land tax. Sections 7(1) and 9(1) apply to all land in the State “which is not exempt from taxation under this Act”. These express provisions necessarily exclude exemptions from taxation under another statute such as the 1919 Act. The same result flows from the application of the principles of construction referred to in Rose v Hvric in the passage quoted. 12 Mr B Sullivan SC, who appeared for the respondent, referred us to s 741 of the Local Government Act 1993 which re-enacted with minor consequential amendments the provisions of s 651 of the 1919 Act. Section 741 does not apply to the 1993 land tax year because it was not in force at the relevant time. However the re-enactment of s 651 as s 741 of the 1993 Act demonstrates, if that is required, the continuing authority of s 651 but both exemptions are conferred by another Act. 13 The company’s right to the benefit of the exemption under s 651 would have been clear beyond argument if ss 7(1) and 9(1) had referred to land which was exempt from taxation under “this or any other Act”. The restrictive terms of those sections may be contrasted with s 4 of the Stamp Duties Act 1920 and cl (9) of its Second Schedule. Section 4 charges the several instruments and matters described or mentioned in the Act and in the Schedules with the several duties and at the several rates in the Act and in the Schedules specified “which duties … shall be subject to the exemptions contained in this Act and the said Schedules and in any other Act for the time being in force”. Clause 9 of the Second Schedule exempts from stamp duty under Part 3 of the Act “Generally any instrument expressly exempted under any Act”. 14 In my opinion therefore the appeal should be allowed. Counsel for the Commissioner contended that in any event the subject land was not within the exemption in s 651(1) because during the relevant years it was not under the management and control of the council. The primary Judge rejected this submission on the evidence and was clearly correct in doing so. 15 In my opinion the following orders should be made:

(1) Appeal allowed with costs;

(2) Judgment and orders of the Administrative Law Division set aside;

(3) In lieu thereof order that the appeals to that Division from the disallowance of the company’s objections to the amended assessments for the 1990, 1991, 1992 and 1993 land tax years be dismissed;

(4) The respondent is to pay the Commissioner’s costs of the proceedings in the Administrative Law Division;

(5) The respondent to have a certificate under the Suitors Fund Act if qualified.

16    SHELLER JA: I have had the benefit of reading in draft Handley JA’s reasons for judgment. In Public Service Association of New South Wales v Industrial Commission of New South Wales (1985) 1 NSWLR 627 at 650 Priestley JA summarised the reasoning in Rose v Hvric (1963) 108 CLR 353. His Honour said:

“The reasoning in Rose v Hvric involves the following sequence of steps. (1)(a) Exceptive words such as those used in s74 have no legal effect beyond saving earlier enactments which would otherwise be inconsistent with a later provision. (b) In regard to later enactments they have no legal effect at all. (2) Although the enactments in question were contemporaneous, the same result must apply in that the exceptive words in s74 could have no legal effect. (3) ‘Expressly’ in s74 merely served to emphasize what is in any event the ordinary rule and cannot be understood as excluding enactments by implication, because the ordinary rule does not. (4) But there is a difference between inconsistency by implication and inconsistency by inference. This distinction is a distinction between (i) a later provision the meaning of which showed that a particular subject matter was intended to be dealt with by the provision, and (ii) a later provision which, although it would logically lead to the subject matter being dealt with in a particular way, did not itself, as a matter of its own meaning, say so. (5) Although there was inferential inconsistency between the Licensing Act , s154 and the Justices Act , s74, the meaning of s154 was not inconsistent with s74. The next step the draftsman might have been expected to take was not taken.
In reaching the conclusion in step (5) the High Court pointed out that both sections in question were expressed affirmatively and the question resolved itself into whether s154 notwithstanding its affirmative form contained a negative implication precluding the application of the general provision of s74 (see especially at 359-360).”

17    Of particular significance in the present case was the statement by the High Court in Rose v Hvric at 360 that there must be in the later provision an actual negation of the earlier.

“ Ex hypothesi there is no negation in words, but there must be a negation as a matter of meaning. Lord Chief Baron Comyns expressed the point by saying that affirmative words do not take away a former statute but where they ‘in sense contain a negative’: Com. Dig. tit. Parliament, R.25 . Only where that occurs is the general test satisfied which has often by laid down in respect of repeal by implication, that the contrariety between the earlier and later enactments must be such that ‘effect cannot be given to both at the same time’: Kutner v Phillips [1891] 2 QB 267 at 272; Hack v Minister for Lands (1905) 3 CLR 10 at 23-24; see generally Hill v Hall (1876) LR 1 ExD 411 at 413-414; Flannagan v Shaw [1920] 3 KB 96.”

18 At 360 the High Court posed the question of whether in the legislatively contemporaneous particular provision there was a negative implication forbidding the imposition of a penalty in lieu of imprisonment for a second or subsequent offence permitted by the legislatively contemporaneous general provision. As Priestley JA pointed out in his summary, inconsistency by implication is enough, inconsistency by inference is not. The implication in the present case is drawn from s7(1) of the Land Tax Management Act 1956 which levies the land tax on the land value of all land situated in New South Wales which is owned by taxpayers other than land which is exempt from taxation “under this Act”. In my opinion, it is not possible to give this subsection effect “according to its true construction” (Rose v Hvric at 357) consistently with the exemption to be found in s651(1) of the Local Government Act 1919. Accordingly, the application of s651(1) to land tax is precluded. 19 Substantially for the reasons given by Handley JA, I agree with the orders that his Honour proposes.
20 DAVIES AJA: I have had an opportunity to read the reasons for judgment prepared by Handley JA. I concur generally with the views expressed by his Honour. However, I have been influenced not only by the terms of ss 7 and 9 of the Land Tax Management Act 1956 ("the Act") and those provisions of the Act which have dealt specifically with land owned by a council, s 10(1)(a) and its replacement s 21C, but also by s 32 of the Act which provides:

(1) Where land is occupied, controlled, or used by a person who is not the owner and there is no lease or agreement for a lease for a definite term in respect of the occupancy, control, or user of the land, the person occupying, controlling, or using the land shall be deemed (though not to the exclusion of the liability of any other person) to be the owner of the land:
Provided that the Chief Commissioner may exempt the person occupying, controlling, or using the land from the provisions of this section, if he is satisfied that the arrangement is of a temporary nature, as to which matter the decision of the Chief Commissioner shall be final and conclusive.
(2) The owner of the land shall be deemed to be the primary taxpayer and the person so occupying, controlling, or using such land to be the secondary taxpayer; and from the land tax payable by the latter there shall be deducted such amount (if any) as is necessary to prevent double taxation.

21 The effect of the totality of the provisions is that the Act deals with the circumstance where land is owned by a council and with the circumstance where land is occupied, controlled or used by a person who is not the owner. The Act therefore covers most of the ambit of the exemption provided by s 651 of the Local Government Act 1919 and does so in a way which is inconsistent with that section. The provisions of s 21C(2) impose a liability upon, inter alia, a lessee of land from a council and s 32 stipulates a liability upon the owner of land notwithstanding that it is used, occupied or controlled by someone else. 22 The Act thus expresses an intention contrary to the exemption under s 651 of the Local Government Act. Therefore, s 651 neither applies nor purports to apply. 23 I agree with the orders proposed by Handley JA.
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